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Another IRS denial of extension request - with a twist!


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We filed 2 extensions for 2 plans with plan year ending 4/30/21.  The extensions were sent to Ogden, Utah, return receipt requested on November 3, 2021.  One envelope, two extensions. We typically file extensions one month before the due date.  Today, one of our clients received a denial of the extension request.  Upon closer review of the crumpled, torn-up return receipt from the US Post Office, the stamped date of receipt was December 6, 2021.  While this is after November 30, most assuredly the envelope was mailed in time as the US Post Office could never deliver anything from Florida to Utah in 6 days!    So we notified the other client that they would likely receive a denial as well.  Well, guess what?  They received their letter from IRS today, too!  But theirs WAS APPROVED!

It's a darn shame that we are at the mercy of IRS and the US Post Office.  This is totally unfair to all of us and our clients.  IRS should immediately develop a system to electronically file extensions!  Or do away with the 7 month deadline all together!  It is painfully obvious that they do not have the manpower to conduct their "business".  It took them 2 1/2 months to process a form!  We are basically powerless to do anything other than pay $750 and file under the Delinquent Filing program.  Not worth the aggravation to fight it or risk it for our client.  I guess we need to file these 2 months early to TRY to avoid the problem we had with the 2019 filings.  I don't think they got around to processing those requests until the following year!

Has anyone figured out how IRS is able to have their letters delivered on the date they issue them?  Time travel?

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We had ALL of our December 2020 extensions denied.  We sent via Fed Ex and had the delivery information.  Though it took them longer than it should have to get one set delivered they were all sent before the deadline, which should have made them timely.  Spoke to IRS they basically acknowledged there was an issue on their end and we were told to send the mailing confirmation information in along with all of our 5558s and they would review and notify our clients of the mistake.  This was in October.  A couple of weeks ago all of these clients received a notice from the IRS saying they needed more time to review.

Agree, not sure why they can't figure out a way for electronic filing of the 5558 when everything else is submitted electronically

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3 hours ago, Brenda Wren said:

Or do away with the 7-month deadline all together! 

Isn't this statutory?

I'm a retirement actuary. Nothing about my comments is intended or should be construed as investment, tax, legal or accounting advice. Occasionally, but not all the time, it might be reasonable to interpret my comments as actuarial or consulting advice.

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3 hours ago, Brenda Wren said:

Or do away with the 7 month deadline all together!

 

10 minutes ago, david rigby said:

Isn't this statutory?

This is my understanding too.  It will literally take "an act of Congress" to remove that 7 month deadline.

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On 2/22/2022 at 7:08 PM, david rigby said:

Isn't this statutory?

I could be wrong, but I just checked and I can't find it in either ERISA (Sec. 103 is where I would expect it) or the Code (Sec. 6058). Treas. Reg. sec. 301.6058-1(a)(4) says to be filed by deadline in form. Maybe I'm wrong and someone else will have the cite.

Luke Bailey

Senior Counsel

Clark Hill PLC

214-651-4572 (O) | LBailey@clarkhill.com

2600 Dallas Parkway Suite 600

Frisco, TX 75034

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Close Luke....one more section and you would have found it. ERISA § 104(a)(1)

Quote

The administrator of any employee benefit plan subject to this part shall file with the Secretary the annual report for a plan year within 210 days after the close of such year (or within such time as may be required by regulations promulgated by the Secretary in order to reduce duplicative filing). The Secretary shall make copies of such annual reports available for inspection in the public document room of the Department of Labor.

 

Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance.

Corey B. Zeller, MSEA, CPC, QPA, QKA
Preferred Pension Planning Corp.
corey@pppc.co

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